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Bartering Privately Held Stock for Other Property

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privatestocktot

Junior Member
What is the name of your state (only U.S. law)? Florida

Can I legally post and offer to trade my privately held stock for a motor home or real estate?

How exactly can a person offer up privately held stock for sale without violating SEC solicitation rules?

Can I use sites like Craigslist to offer it?
 
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tranquility

Senior Member
Of course you can. You would be selling the stock for the FMV of the item received. Then you report it on schedule D.
 

privatestocktot

Junior Member
Thank you for your response looking for a little more detail. You mentioned facts and plan... Are you referring to a scenario?? I will offer a scenario such as this...

Suppose I said: I have millions of shares in a privately held shares in a widget company. The current value is in the neighborhood of $3/share. Would like to trade for a home or high end mobile home in the $400,000 price range. Would pay triple the home value in stock. Would handle the transaction like a closing on a house...

Is it legal to post an offer like this hypothetical one? May I ask if you are speaking in terms of tax implication? I am not so much concerned about the tax angle as I am the solicitation angle. Thanks.
 
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Thank you for your response looking for a little more detail. You mentioned facts and plan... Are you referring to a scenario?? I will offer a scenario such as this...

Suppose I said: I have millions of shares in a privately held shares in a widget company. The current value is in the neighborhood of $3/share. Would like to trade for a home or high end mobile home in the $400,000 price range. Would pay triple the home value in stock. Would handle the transaction like a closing on a house...

Is it legal to post an offer like this hypothetical one? May I ask if you are speaking in terms of tax implication? I am not so much concerned about the tax angle as I am the solicitation angle. Thanks.
So you are willing to trade $1,200,000 for $400,000?
 

xylene

Senior Member
You are contemplating a million dollar deal and you don't have a proper lawyer to advise you?
 

privatestocktot

Junior Member
Appreciate your comments & ?'s, including the Star Trek take on contracts. I could write a book on my legal situation and the "journey" I have been on with and without a lawyer. Fact of the matter is that in my circumstance I have very little money and a whole lot of private stock. You would think after paying a lawyer $23,000 I could get a straight answer out of him... hense the "FreeAdvice Legal Forum". I posted the question to the Law Advice section of this website and they said they couldn't offer me an answer and they said to try the forum... Go figure?!? At any rate I am hoping that I can get a real dialogue going that results in solid answers or at least references or links that I can research myself... Thanks for reading.
 

xylene

Senior Member
Fact of the matter is that in my circumstance I have very little money and a whole lot of private stock.
Then sell your property.

It does not cost 23k to ask a lawyer a question.

I do not understand your desire to barter at all and especially not for a nearly threefold haircut. Makes no sense.
 

tranquility

Senior Member
Then sell your property.
Selling stock by advertisement has special rules. There are exceptions in D and in a few of the rules and the OP is seeing if his plan can be done legally.

Private offerings are a complex area that I have some reading, but have no expertise. I'm not going to do the legal research required to give an answer. The OP had a good LEGAL question, but PRACTICALLY the only way he can get any money is to take a huge haircut. He's going to be selling a minority interest in a closely-held corporation. Anyone who buys is an idiot, unless the discount is huge.
 

xylene

Senior Member
Selling stock by advertisement has special rules. There are exceptions in D and in a few of the rules and the OP is seeing if his plan can be done legally.

Private offerings are a complex area that I have some reading, but have no expertise. I'm not going to do the legal research required to give an answer. The OP had a good LEGAL question, but PRACTICALLY the only way he can get any money is to take a huge haircut. He's going to be selling a minority interest in a closely-held corporation. Anyone who buys is an idiot, unless the discount is huge.
I understand his situation. He has a regulated asset that he doesn't have a clue how to deal with, and instead of complying with the law, which certainly does allow you to sell privately held stock, the disclosure requirement of D are not so onerous that thousands of such transactions occur daily.

I don't understand why he wishes to take substantially more off the top by trading for "high end motor home" instead of cash. That makes no sense. If you are crying poverty you want cash money, not pay an even bigger penalty to sink your asset into something that is instantly and dramatically depreciating.

And you certainly can't avoid the SEC by bartering or using Craigslist. If he has spent 23 grand to get to this point... well he is still at square one. There are a large number of brokers, traders, and other full service firms fully capable of marketing, selling, and dealing with any resultant liabilities related to the sale of this asset.

I suspect that this cash shy behavior and having no money while having millions in private stock is the result of some other financial problem that makes having no money but a motor home desirable. At that is why no one is touching.
 

tranquility

Senior Member
the disclosure requirement of D are not so onerous that thousands of such transactions occur daily.
Do you happen to know the requirements? It seems as though that is the core of the OPs question.

I don't think he'll get a buyer either. But, that is not his question.
 

xylene

Senior Member
Do you happen to know the requirements? It seems as though that is the core of the OPs question.

I don't think he'll get a buyer either. But, that is not his question.
That depends on who he is in the company, which rule they will use to sell the stock, how much will be sold in a year... Also who buyer is (accredited) and state laws...

This is DIY work (for a non securities lawyer)about as much as rebuilding an automatic transmission would be -for a non mechanic, who also had to fabricate his own tools.
 

tranquility

Senior Member
That depends on who he is in the company, which rule they will use to sell the stock, how much will be sold in a year... Also who buyer is (accredited) and state laws...
I agree completely.

There are lots of things you need to do. What things depend on the facts and the precise plan.
 

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